ISLAMABAD, June 13: The government would soon deregulate the wheat trade, and procure limited quantities for strategic reserves to keep prices stabilized.

This was stated by Adviser to the Prime Minister on Finance Dr Salman Shah while talking to reporters here on Monday at a function arranged by Department for International Development (DFID) of UK, Mr Shah said the six per cent withholding tax on wheat trade was being removed but Pakistan would not allow import of wheat from India owing to quarantine reasons.

He said issues relating to meat import had been taken up with New Delhi aimed at evolving some procedure for passage of livestock truck from Wahga border. Passageof trucks from the border point remained suspended for years

Mr Shah said the import of onions and potato from India had started. He said Pakistan had asked India to resolve issues relating to meat and livestock trade, and open inland routes for this purpose.

He said quarantine arrangements had already been made at Wahga border for this purpose.

He said the government had decided in principle to hand over management of wheat stocks to the private sector but it would procure wheat for strategic reserves to stabilize prices through releases from the official stocks whenever open market prices go up.

Responding to a question, Salman Shah said there was nothing wrong with export of wheat or wheat flour to Afghanistan as it was Pakistan’s market and a great opportunity. He said it was government’s policy to increase wheat supplies through import and enhanced domestic production to meet local requirement as well as of Afghanistan.

Responding to another question, Mr Shah said wheat would be imported from specific countries. He said the government would provide wheat flour to Utility Stores Corporation (USC) from a million tons stock currently available with Pakistan Agricultural Storage and Supplies Corporation (Passco).

Answering a question whether recent inflationary pressure had any impact on poor population, he said inflation was a serious issue, which had affected the poor the most because of higher inflation in food group.

He said the government was tackling the issue in a multi-dimensional way through supply-side management and tightening of monetary policy shortage of essential items had larger impact on poor people than the rich.

He said it was a wrong perception that next year’s budget was pro-rich budget because higher investments in development programme and social sectors would create employment opportunities and reduce poverty.

Commenting on a Standard and Poor’s last week report that inflation could pose threat, he said the S&P team did not visit Pakistan after the budget, they did not analyze supply side management of the government, failed to examine the easing of the oil prices and did not take into account Pakistan’s tightening of the monetary policy.

Earlier, Yousaf Samiullah, DFID’s head said his organisation would extend about $500 million grant to Pakistan in the next three years to support its poverty reduction efforts. For the next year, it would provide 70m pound sterling to Pakistan.

Additional Secretary Finance Asif Bajwa said the PRSP had not been communicated properly to even the middle level policy making officials and they were not clear about the PRSP concepts.